How to Improve Your Home Loan Eligibility

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“Every bird needs a nest.” This is a popular saying among people since ages. Everyone has an aspiration to live in their self-owned place and you may not be indifferent to it. However, your aspiration can be turned down by the soaring rates of real estate. The prices of real estate tend to rise at a gigantic pace, and it is impossible for an average salaried person to save and procure the benefits of owning his own place. Still, the hope to buy a self-owned place can be kindled by borrowing a home loan. There are several banks and financing bodies in the market, which allow you to borrow a home loan and move into a place of your own. But, like every other borrowing, you need to be eligible to avail it. Eligibility for home loan is decided by a particular bank after gathering and analysing information on several factors. As a result, some of you may not get a home loan, even if you are earning good. To improve your chances of borrowing a home loan, take a look at these 4 ways, which help in augmenting home loan eligibility.

Go for a longer tenure. This is the most common method of enhancing the worthiness of borrowing a loan. It may be any kind of loan, this method always work. The reason behind its success is the reduction of EMI. With longer tenure, the EMI drops down significantly and your chances of paying it regularly increase significantly. So, banks are known to sanction long term home loans easily.

Improve Your Credit score. Poor credit score speaks for rejection of loans. But, you can still improve your credibility by repaying the existing loans, before borrowing a new one. According to industry standards, if the borrower has failed to pay 12 instalments on regular basis, then he is not eligible to borrow a new loan. When faced with such situation, you can instantly improve your credit worth by repaying the loans in full, or in parts, whichever option is convenient for you.

Search for alternative Income Sources. If you are married, and your spouse is working too, then this option is the best way to improve your eligibility for loans. Banks do allow clubbing the income of borrower with his spouse, parent, or offspring to calculate home loan eligibility. Still, all the clubbing members are expected to be more than 24 years of age, and need to follow certain criteria decided by the lending bank.

Ask about using Classifying perks and incentives as income. Generally, banks have a tendency of sanctioning loans to individuals after considering their basic pay. At times, the basic pay can be much less while the gross pay can be really good. This is possible when you have loads of perks and incentives filling your salary slip. While borrowing a loan, you can submit the proof of such incentives to improve your eligibility.

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wikiHow is a “wiki,” similar to Wikipedia, which means that many of our articles are co-written by multiple authors. To create this article, volunteer authors worked to edit and improve it over time. This article has also been viewed 1,691 times.